Former state Sen. Derrick Shepherd sentenced to 37 months in prison

Susan Poag/The Times-PicayuneState Sen. Derrick Shepherd apologizes to his family and constituents Oct. 10 after pleading guilty to one count of conspiracy to commit money laundering at the Hale Boggs Federal Courthouse in New Orleans. With him were his attorney John Reed; his mother, Margie H. Richardson; and his father, Eddie Shepherd.

Calling former state Sen. Derrick Shepherd a "huge disappointment" for throwing away a promising career in politics, law and the military, a federal judge sentenced Shepherd to 37 months in prison Thursday for a 2008 federal money laundering conviction.

The sentence imposed by U.S. District Judge Carl Barbier was at the top end of sentencing guidelines, which called for 30 to 37 months.

Known for his dapper suits, Shepherd, 40, stood before Barbier wearing a blue prison jumpsuit with "FEDERAL" printed across the chest, his hands and feet in shackles.

Susan Poag/The Times-Picayune'He's looking forward to getting this behind him and getting back so he can serve the community,' said Eddie Shepherd, father of Derrick Shepherd.

"I'd just like to tell your honor that I apologize. I know I've used poor judgment and disappointed your honor and the community," Shepherd said softly, a far cry from the typical brash, hard-charging demeanor he had used to push bills through the Legislature.

A Marrero Democrat, Shepherd resigned his Senate seat and pleaded guilty in October 2008 to conspiracy to commit money laundering after helping thrice-convicted bond broker Gwendolyn Moyo launder $141,000 from the sale of bogus bonds, keeping nearly half the money for himself.

John Reed, one of Shepherd's attorneys, asked for leniency, saying Shepherd had displayed "courage" in pleading guilty and cooperating with investigators in the ongoing case, which includes former U.S. Rep. William Jefferson and his sister, Betty Jefferson, a New Orleans assessor, as unindicted co-conspirators.

Reed also said that Shepherd, a former judge advocate general in the Army Reserves, had been wounded in the 1990-91 Persian Gulf War.

Barbier said he had been "very impressed" with Shepherd's fast-track political career, which saw him rise from an unknown lawyer to state representative to state senator in the span of four years.

But the judge said Shepherd's good deeds and his rise from humble beginnings as outlined in 14 letters from Shepherd's family and friends had been overshadowed by his "reprehensible criminal conduct," including lying to the FBI and fabricating documents after being confronted with the evidence against him.

Susan Poag/The Times-PicayuneU.S. Attorney Jim Letten said Shepherd's conviction coupled with convictions of several other public officials in recent years are changing the New Orleans area's culture of corruption.

"In the final analysis, you've been a huge disappointment to me, to yourself, to your family and to everyone who knows you," Barbier said. "You violated your oath as an attorney. You violated your oath as a legislator. And you violated your oath as an officer in the U.S. military."

U.S. Attorney Jim Letten said Shepherd has provided "a good bit of cooperation," but added that prosecutors chose not to request a lighter sentence than the federal guidelines.

"This case sends the message that if you violate the public's trust and you violate the law, there will be a severe price to pay," he said. "We're going to keep sending that message until it sinks in."

As they left the Hale Boggs Federal Courthouse in New Orleans, Shepherd's relatives, including his parents, said he is remorseful and hopes one day to atone for his mistakes.

"He's upbeat," said his father, Eddie Shepherd. "He's looking forward to getting this behind him and getting back so he can serve the community."

Shepherd has been in federal custody since his Jan. 14 arrest during a traffic stop in New Orleans on warrants for theft and domestic violence. It has not been determined where he will serve his sentence. Also unknown is whether he will get credit for more than a year under house arrest after he was booked in a domestic dispute on the West Bank in July 2008.

Barbier fined Shepherd $45,000 and sentenced him to three years of probation after his release from prison.

He also ordered Shepherd to undergo substance-abuse treatment and mental health counseling, citing Shepherd's two arrests on domestic violence charges since his April 2008 federal indictment.

Shepherd's guilty plea on Oct. 10, 2008, came just four days before he was to stand trial with Moyo, who was convicted on 41 counts of fraud, conspiracy and money laundering. She was sentenced in April to 20 years in prison, the maximum allowed.

William and Betty Jefferson are identified in Shepherd's and Moyo's indictments and in documents presented at Moyo's trial as having received payments from bank accounts containing her illegal proceeds.

The indictments said Shepherd had been steered to Moyo by William Jefferson in late 2006 after Shepherd lost a bid to unseat Jefferson. Jefferson, who lost the seat to Anh "Joseph" Cao in 2008, was later convicted of soliciting bribes in connection with business dealings in west Africa. He was sentenced to 13 years in federal prison in November.

Moyo netted about $2 million selling phony bonds that were supposed to serve as insurance policies that could be cashed if contractors failed to complete construction projects, according to testimony at her trial.

After the state Department of Insurance in 2006 obtained a court order freezing Moyo's bank accounts and instructing her to stop selling bonds without a license, Shepherd used his law firm to launder $141,000 in ill-gotten premiums for Moyo, taking $65,000 of the proceeds

James Zoucha, 67, of Oceanside, Calif., who acted as the "straw man" president of one of Moyo's fraudlent companies, pleaded guilty to conspiracy to commit mail and wire fraud and was sentenced to three years of probation in April.

Letten said Shepherd's conviction coupled with convictions of several other public officials in recent years are changing the New Orleans area's culture of corruption.

"Corruption won't ever go away entirely; it's part of the human condition," he said. "But these convictions have helped fuel an incredible demand by the public for transparent and honest government. Our job is to keep up the pressure."